CGit: Interim report, Q2 – CGit Holding AB (publ)

 

 

Mölndal 2022-08-19

 

Financial overview

(Tkr) 2022Second Quarter 2021Second Quarter 2022First half year 2021First Half Year 2021Full year
Net sales 23 382 29 253 51 223 53 515 135 569
Operating result before depreciation and amortisation (EBITDA) 286 1 613 2 915 2 746 4 924
Operating result (EBIT) -677 758 1 044 1 075 1 537
Profit after tax -599 562 697 751 1 000
Earnings per share after tax (SEK) -0,38 0,36 0,44 0,48 0,63
Number of shares 1 576 000 1 576 000 1 576 000 1 576 000 1 576 000

 

* Revenues decreased by SEK 5.9 million to SEK 23.4 million (SEK 29.3 million in the same period last year). However, it is important to note that SEK 8.5 million of business taken has not been delivered due to component shortages. Our estimate is that SEK 7.5 million of these will be delivered and invoiced in 2022.

– Annual recurring revenue (ARR) from operating activities increased by 5 percent to SEK 6.5 million (SEK 6.3 million in the same period last year).

– The gross margin from operating activities decreased to 57.2% (67.9%), which is 10.7 percentage points lower than the same period last year.

– EBITDA amounted to SEK 286 thousand (1.6), corresponding to a margin of 1.2 percent (5.2).

– During the period, an expense of TSEK 137 has been incurred related to the development of our software solution linked to AI.

– Cash and banking decreased during the quarter from SEK 3.4 million to SEK 2.5 million.

– The Group’s earnings per share for the second quarter of 2022 amounted to SEK -0.38 (0.36).

 

 

THE PRESIDENT HAS THE FLOOR

In a changing world, it is important to be able to react to changes, rethink and adapt to the situation! Globalisation and urbanisation are undergoing major changes, perhaps the biggest in modern times. As a company we are affected in different ways, but that everyone is affected to some degree and needs to relate to this is in my world a fact.

Today we have three crises that have affected our business climate. The pandemic, the climate and war in Europe.

Together, these three crises have affected the supply of components, created a whole new set of conditions for transport and increased the cost of most things, not least electricity generation.

CGit has handled these three crises very well, keeping our ear to the ground and acting quickly and agilely when needed. Already at the end of 2021 we stated that we will have to deal with the component shortage for a long time and in previous reports I have mentioned that it will probably last until well into 2023. But it may be even longer. We started to expand our consulting organisation in order to financially compensate for delayed deliveries in the solutions business, especially in parts of the solutions business where only certain manufacturers are affected!

We also note that we have faced more challenges with component shortages than we could compensate for in a single quarter. This year alone, we have added 6 employees (33 compared to 27 in Q1), most of them to expand our consulting business. It takes a few months to have a full impact on the bottom line and the consulting business is not nearly as revenue-driving as the solutions business traditionally is. In Q1, consulting accounted for 26% of total TB´t and in Q2 consulting is 34% of total TB´t.

Since we have no component shortage on the direct hardware linked to AI/deep learning, I am not worried on a yearly basis. This is also demonstrated by three major orders of SEK 8 million, SEK 34 million and SEK 21 million in turnover. These were carried out after the period covered by the report but are described in Significant events after the period. The deal of SEK 34 million has already been delivered and invoiced in August, the deal of SEK 21 million will be delivered and invoiced in September. The deal of SEK 8 million will be invoiced in Q4. I would like to emphasize that there are no component shortage issues related to these deals and they will be delivered as usual to the customer! In total, these deals alone account for SEK 55 million in Q3!

Delivery problems exist when it comes to complete solutions, including network equipment. However, we have initiated cooperation with other manufacturers who do not have component shortages and who can deliver the same high quality as previous manufacturers. We have taken solution deals of 8.5 MSEK that are not delivered due to the component shortage and that is almost 16% of our total turnover accumulated 2022-06-31. With the knowledge we have now about the skills shortage and lead times, 90% of these deals will be delivered in 2022. Having said that, we have the momentum of the company intact and in line with the targets set. We have done a lot of business in the solution area with a focus on network/security. This is where manufacturers have the greatest problems with component shortages, but also a transport and packaging debt since the major “lockdown” that occurred in Asia during the pandemic. We have seen this challenge coming and we have taken steps to compensate, such as shifting to a greater proportion of consultancy sales and contract sales around our various services and concepts. It has been implemented, but the impact has been delayed.

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Mattias Bergkvist, Managing Director

 

Significant events Q2 2022

Mölndal 2022-04-28

CGit takes new order with new customer, value 1,2 MSEK.
CGit has been entrusted to deliver next generation network infrastructure to a new customer. The customer is a Swedish media company, which is active in streaming and TV, The customer has decided to invest in new technology to meet the requirements of the business and security and capacity. With the new technology that CGit delivers, the customer ensures that the information is always secure and available with high capacity.

Mölndal 2022-05-04
CGit takes new order with new customer, value 3,2 MSEK.
CGit has been entrusted to deliver the next generation network infrastructure to an existing customer. The customer is active in the AI/Automotive segment. The customer has decided to invest in new technology to meet the security, capacity and high availability requirements of the business. With the new technology that CGit delivers, the customer ensures that the information is always secure and available with high capacity.

Mölndal 2022-05-06

CGit takes new order with existing customer, value 2 MSEK.
CGit has been entrusted to deliver next generation IT infrastructure, including both network and storage architecture, to an existing customer. The client is active in software development. The customer has decided to invest in new technology to meet market and business requirements for security, capacity and high availability. With the new technology delivered by CGit, based on next generation state-of-the-art architecture, CGit ensures that customer information is always secure and available with high capacity.

Mölndal 2022-05-11

CGit takes new order with existing customer, value SEK 1.6 million.
CGit has been entrusted to deliver next generation network infrastructure to an existing customer. The customer, which operates in the global telecommunications market, has decided to invest in new technology to meet the requirements of its business and security and capacity. With the new technology that CGit delivers, the customer ensures that the information is always secure and accessible.

CGit has been commissioned to deliver a project on quality control using Artificial Intelligence.
Mölndal 2022-05-31

CGit/Aixia has been commissioned to carry out a project on quality control using Artificial Intelligence. CGit/Aixia will deliver the entire project from inception to full production, including project management, data collection, data power, software, development and security.
The customer, which is active in the circular economy and is present throughout the Nordic region, plans to implement AI in a pilot plant in Sweden together with AIXIA.

Significant events after the end of the period

Mölndal 2022-07-01

CGit takes new order with new customer, value 1 MSEK.

CGit has been entrusted to deliver next generation network infrastructure to an existing customer. The customer, which operates in the global telecommunications market, has decided to invest in new technology to meet greater demand and business requirements, security needs and capacity. With the new technology that CGit delivers, the customer ensures that the information is always secure and accessible.

Mölndal 2022-07-07

 

CGit takes new large order with existing customer, value 34 MSEK.

CGit has been entrusted to deliver a new AI/Deep Learning platform to one of its existing customers. The customer is active in the automotive industry and works with solutions for autonomous driving. The customer’s unique, scalable, open platform is designed to support driver acceptance, use and reliability. With the new AI platform delivered by CGit, the customer ensures the continued development of its solution and that capacity is secured to meet market needs.

 

Mölndal 2022-07-14

 

CGit takes new order with existing customer, value 8,4 MSEK.

CGit has been entrusted to deliver a new data management solution to one of its existing customers. The solution is based on the very latest technology in data storage coupled with AI-Deep Learning platforms. The customer is active in the automotive industry and works with software solutions for self-driving vehicles. The order is based on an evaluation process in which the customer is given 60 days to ensure that the technology meets the expectations and objectives set by the customer. In the development of the solution, other solutions have been discussed but CGit together with the customer has through careful validation landed in this solution. The customer has, in consultation with CGit, the right to change the solution.

Mölndal 2022-07-19

 

CGit takes new order with new customer, value 21 MSEK.

CGit has been entrusted to deliver a new AI/Deep Learning platform to one of its existing customers. The customer is active in the automotive industry and works with solutions for autonomous driving. The customer’s unique, scalable, open platform is designed to support driver acceptance, use and reliability. With the new AI platform delivered by CGit, the customer ensures further development of its solution and that capacity is secured to meet the ever-increasing needs of the market

SWEDISH

CGit_Delårsrapport_Q2_2022

ENGLISH

Interim_Report_Q2_CGit_Holding_AB

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For more information, please contact the Company at:
CEO Mattias Bergkvist
Telephone: 031-762 02 40
info@cgit.se
www.cgit.se

This information is information that CGit Holding AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, on 2022-08-19.

CGit is an IT company based in Mölndal and is part of a group where the wholly owned subsidiary CGit since 2007 has been active in the construction and development of IT infrastructure, including. AI/Deep Learning platforms data centre, security, management, hosting, networking & communications and backup/DR. The company provides services in three business areas; IT operations, IT consultants and IT products, and currently has around 120 customers across several different industries.